Massachusetts added 13,800 jobs in July, but the unemployment rate ticked up a tenth to 5.6 percent as the workforce grew, the Executive Office of Labor and Workforce Development reported today.

The state has added 67,300 jobs since last July, reducing the unemployment rate by 1.6 points. The national rate is 6.2 percent.

Every sector except Government added employment in July, with gains ranging from 5,000 in Professional, Scientific and Business Services to 500 in Manufacturing and Information. On the year, every sector was up except Manufacturing (-600, -0.2 percent).

The household survey showed an even larger annual job gain, 79,900. The labor force was up 9,500 on the month and 24,200 on the year.

The annual numbers are much more significant than the monthly figures, which are in any case preliminary. We are continuing to see a pattern of fairly strong and sustained employment growth, in line with the growth in business confidence tracked by AIM's Index.

The Massachusetts unemployment rate dropped from 7.3 percent to 7 percent in November as employers added 5,000 net new jobs to the Bay State economy.

The November job increase follows a revised 11,900 job gain in October originally reported as 10,800.

Unemployment in Massachusetts now sits at its lowest level since December 2008. The rate also remains significantly below the 8.6 percent figure for the national as a whole.

Six of the 10 private sectors added jobs in November with gains in Leisure and Hospitality; Trade, Transportation, and Utilities; Education and Health Services; Financial Activities; Professional, Scientific and Business Services; and Other Services.

Manufacturing and construction each lost 1,400 jobs during the month.

Year-to-date (December 2010 to November 2011), 51,600 jobs have been added in the Bay State with 56,400 private sector jobs added. Over-the-year (November 2010 to November 2011), jobs are up 55,600, a growth rate of 1.7 percent, with private sector jobs up 59,900, for a growth rate of 2.2 percent. Over-the-year, the national rate of job growth is 1.2 percent with private sector job growth up 1.7 percent.

The report is a positive one, more so than the national report for November, which showed a similar drop in the unemployment rate. The state's job gain was respectable if not spectacular - 5,000 on one survey, 13,900 on the other.

The erosion of government employment continues to exert downward pressure. One caveat is that a large chunk of the reported November job gain came in the Leisure and Hospitality sector, where the statistics have been volatile - and of course these tend to be lower-paying jobs.

The Massachusetts unemployment rate dropped to its lowest level in 30 months during August, but the good news was tempered by a reversal in the steady growth in jobs throughout the commonwealth.

State officials announced this morning that that the jobless rate declined from 7.6 percent to 7.4 percent during August, the lowest rate since February 2009. The Massachusetts unemployment rate remains well below the 9.1 percent mark for the nation as a whole.

At the same time, the total number of jobs in the Massachusetts economy dropped by 2,800 during August even after adjusting for the effects of 6,100 Verizon workers who were on strike at the time the numbers were compiled. The decline slows a recovery in which Massachusetts employers have added 48,000 jobs for a growth rate of 1.5 percent since August 2010.

Manufacturing, government and the financial sector led the August jobs decline. Transportation, warehousing and retail trade added jobs during the month.

The August job loss follows a revised 10,400 job gain in July, previously reported as a 12,700 job gain.

“The concentration of high-skill and knowledge companies in the Massachusetts economy continues to allow us to outperform the rest of the country. But the continued uncertainty surrounding debt problems both in Europe and the United States is beginning to weigh down growth here in the commonwealth,” said Andre Mayer, Senior Vice President of Research and Communication at AIM.

Announcement of the August employment report comes a week after the AIM Business Confidence Index fell into negative territory on its 100-point scale for the first time since September 2010.

The state job estimates for August show 3,212,100 Massachusetts residents were employed and 258,100 were unemployed, for a total labor force of 3,470,200. Over-the-month, 3,700 more residents were employed and 5,000 fewer residents were unemployed. Since October 2009, there are 43,700 more residents employed and 46,300 fewer residents unemployed as the labor force decreased by 2,600. Totals for August may not add exactly due to rounding.

The unemployment rate is based on a monthly sample of households, while the job estimates are derived from a monthly sample survey of employers. As a result, the two statistics for August exhibit different trends.

Massachusetts added 12,700 jobs last month as the commonwealth continued to post stronger economic numbers than the nation as a whole.

The Executive Office of Labor and Workforce Development reported that six of the 10 private industry sectors added jobs in July, with the largest gains coming in Education and Health Services; Other Services; Trade, Transportation and Utilities; Manufacturing; Professional and Business Services; and Financial Activities. The July job gain follows a revised 9,400 job gain in June, previously reported as a 10,400 job gain.

The unemployment rate remained steady for a third consecutive month at 7.6 percent, well below the national rate of 9.1 percent.

It is, overall, another pretty decent report – the third in the past four months. While the month-to-month fluctuations may arise from statistical issues, we do seem to be seeing a moderately positive trend. The job growth is actually quite strong – what moderates the performance is lack of movement in the labor force. In a situation of reasonably robust economic growth and job creation, we should be seeing more people come back into the workforce.

Massachusetts has had much better job growth than the nation in recent months, although the most recent national report was pretty good. The MassBenchmarks indices prepared by Alan Clayton-Matthews at Northeastern University, designed to track Gross State Product, show Massachusetts outperforming the nation by a significant margin (4.3 percent annual growth) in the first half of 2011.

The employment report showed that Massachusetts employment grew by 56,800, or 1.8 percent, between July 2010 and July 2011. Private sector jobs are up 61,900, a growth rate of 2.2 percent, with gains in nine of the ten sectors. Year-to-date, (December 2010 to July 2011), 53,000 jobs have been added in the Bay State with 58,200 jobs in the private sector.

Manufacturing gained 2,400 jobs (+0.9%) in July as Durable Goods gained 1,600 jobs (+0.9%) and Non-Durable Goods were up 800 jobs (+0.9%). From July 2010 to July 2011, Manufacturing has gained 5,900 (+2.3%) jobs with seven out of every ten job gains in Durable Goods. Durable Goods growth industries include Fabricated Metal Products; Machinery; Computer and Electronic Products; and Electrical Equipment, Appliances and Components.

Massachusetts employers created 10,400 jobs during June, but the unemployment rate remained unchanged at 7.6 percent.

The commonwealth lost 4,100 jobs in May, while unemployment declined by two-tenths of a percent - the same rate drop we saw in April when Massachusetts posted a record monthly employment gain of 20,300.

What’s going on? How can we make sense of these numbers? Is the economy improving or not?

The unemployment rate tells us relatively little about how the economy is doing month to month – even though high unemployment may well be the single greatest economic concern today. That’s because it’s a product of two factors: the number of people with jobs, and the number of people in the workforce. We actually learn much more by looking at each factor separately than we do by combining them.

A gain of 26,000 jobs in Massachusetts over the past three months is good news. That total, with the substantial addition in June, tells us that despite a falloff in economic growth, jobs are being created in our state, and at a pace sufficient to restore employment to pre-recession levels over time. (The message from national results is less positive.)

What is not good news is the workforce side, up only 15,000 since the bottom of the downturn in October 2009. This is a matter of participation rates more than population growth. The job market is much better than it was, but has not improved enough to draw potential workers to seek employment. There are too many people – and some would say too many employers as well - sitting on the sidelines. Real, sustained progress will depend on getting everyone back in the game.

At 7.6 percent for two consecutive months, the Massachusetts unemployment remains well below the 9.2 percent national rate. Both the unemployment rate and the number of unemployed residents are the lowest since February of 2009.

Six of the ten private sectors added jobs in June with the largest over-the-month gains in manufacturing followed by: construction; professional, scientific and business services; leisure and hospitality; financial activities; and educational and health services. June's monthly gain follows a revised May monthly loss of 4,100 jobs statewide and a 1,300 job loss in the private sector.

The battle to moderate a pending 40 percent increase in average unemployment insurance taxes facing Massachusetts employers on January 1 now stretches from Boston to Washington, DC.

Associated Industries of Massachusetts this morning joined business organizations from throughout the country in asking Congress to continue to waive the interest on loans used by Massachusetts and 31 other states to pay unemployment insurance claims. AIM also asked Congress to waive penalties under the Federal Unemployment Tax Act levied on employers in states borrowing from the federal government to meet their obligations to jobless workers.

The National Governors Association made similar requests for an extension of interest free borrowing and penalty waivers in July.

The activity in Washington comes as AIM works with the Patrick administration to find ways to ease the average $258-per-employee increase set to hit Massachusetts businesses as the anemic job recovery drains the state fund used to pay unemployment benefits. Analysts fear an increase of that magnitude could create a dangerous downward economic spiral by suppressing job growth and creating even more demand in the unemployment system.

Projections from the Massachusetts Division of Unemployment Assistance show that the Unemployment Insurance Trust Fund, which ran a balance of more than $2 billion prior to the recession, is currently down to $148.5 million and will begin 2011 some $202 million in the red. That deficit would trigger a move to the highest rate schedule permitted under Massachusetts law, raising the average UI cost per employee from the current $646 to $904.

A move to schedule G would increase total contributions from Massachusetts employers from $1.576 billion to $2.235 billion. Employers also face a potential increase in the recently doubled $33.60-per-employee tax they pay to fund health benefits for jobless people.

The request to Congress by AIM to waive interest on UI borrowing reflects the association’s position that repayment of federal loans should be stretched out over several years to prevent rate shock to employers while the economy strengthens.

In the long run, AIM believes the funding problems underscore a need for structural reforms to the most generous unemployment system in the country. Massachusetts is the only state, for example, to provide 30 weeks of jobless benefits at the standard benefit amount. The association offered a comprehensive reform plan to the Massachusetts Legislature last year and expects to do the same in 2011.

Average UI rates paid by Massachusetts employers increased by $111 per employee this year after Governor Deval Patrick and the Legislature headed off a much larger jump by freezing the system at Schedule E. The rate freeze still produced increased costs because of deteriorating experience ratings as employers reduced payrolls in the wake of the sluggish economy.

Employers added 2,100 jobs during August as Massachusetts chalked up its seventh consecutive month of employment gains, state officials reported today. The unemployment rate declined from 9 percent to 8.8 percent, well below the 9.6 percent national jobless rate.

Massachusetts is currently third in rate of job growth in the nation year-to-date based on the July preliminary estimates for all states. The commonwealth has added 64,300 jobs since December 2009.

The private sector added 4,000 jobs during August with the largest gains in Leisure and Hospitality; Professional, Scientific and Business Services; and Construction. Government lost 1,900 jobs mostly due to reductions in federal government temporary Census positions. Over-the-year, jobs are up 48,500 (+1.5 percent) with private sector jobs up 44,700 (+1.6 percent).

It’s another positive report - jobs up, private sector jobs up more, expansion in the expected sectors, and a pattern of monthly gains and upward revisions. The downside is that the upside isn’t all that far up – growth is still slow, and we’re not seeing a lot of people returning to the labor market. Employment numbers continue to jibe with the AIM Business Confidence survey results, notably in that conditions in Massachusetts appear to be somewhat better than in the nation as a whole.

The August jobs expansion followed a revised increase of 15,200 jobs in July. State officials report that Massachusetts had more than 3.2 million jobs in August.

Slower-than-expected job growth in the private sector, coupled with the loss of thousands of temporary Census jobs, left the national unemployment rate steady at 9.5 percent during July, the federal government reported this morning.

Private-sector payroll employment edged up by 71,000, more than double the downwardly revised figure for June but well below the forecast of 90,000 new jobs.

The consensus expectation was for a slight uptick in the unemployment rate, which didn’t happen even though the employment numbers were worse than expected. The drop in government employment was greater than expected – the Census jobs were temporary, but there have also been a lot of state and local layoffs with the new fiscal year beginning in many jurisdictions.

More surprising was the weak private sector job creation, which came in a bit below even the more pessimistic estimates. First-time unemployment claims are also on the rise.

A particularly negative sign in the July report is a decline in temporary hiring, which is considered a precursor of broader hiring into regular jobs. Manufacturing continues to show relative strength, boosted by improvement in the automotive sector.

The disappointing job numbers confirm the results of multiple reports this week that suggest a slowing of the already tentative economic recovery.

AIM reported on Monday that lingering doubt about the strength of the economic recovery caused confidence among Massachusetts employers to take its largest one-month drop in July since the depths of the recession in February 2009. The AIM Business Confidence Index (BCI) dropped 5.2 points in July to 48.5, falling below 50 – neutral on its 100-point scale – after moving into positive territory in May and June.

Massachusetts remains slightly stronger than the nation as a whole, with a 9 percent unemployment rate and a 6.4 percent increase in gross state product during the second quarter. Economists expect that growth rate to slow to approximately 4 percent during the second half of the year.

The public is pretty discouraged, and the graph below shows why: The proportion of the United States population that is employed has fallen from almost 65 percent in 2000 to 58 percent this year. The American job creation machine, so powerful in the 1990s, has sputtered and stalled over the past decade.

We never fully recovered from the “dot-com” recession (a fact evident in Massachusetts, but concealed at the national level by workforce growth). The recession just ended (supposedly) was far more serious nationally, and has been followed by a so-far jobless recovery. Concerns about job prospects are what has driven consumer confidence back down – and there is obviously a basis for those concerns.

Labor demand continues to be weak – there aren’t enough new jobs being created to raise hiring much above separations (layoffs and quits). We need about twice the private-sector gains of recent months to keep pace with natural growth in the workforce. This is a long-term issue as well as an immediate problem.

As one senior business economist notes, “Structural unemployment may well increase over time if large numbers of people remain without a job for long periods of time, and thus lose their skills and attachment to the labor force.” But, he adds, “it is not clear that this process has started yet."

The Massachusetts unemployment rate dropped to 9 percent in June from 9.2 percent in May, remaining below the 9.5 percent national rate, the state’s Executive Office of Labor and Workforce Development reported yesterday.

Unemployment-rate declines at both state and national levels were due primarily to decreases in the labor force rather than to job creation.

In Massachusetts, the private sector added 3,400 jobs while government lost 2,900 jobs. The largest private-sector job gains in June were in leisure and hospitality; construction; and trade, transportation and utilities. The government decline reflects the winding down of temporary employment for the federal Census.

The job growth follows on a revised 15,200 jobs gain in May.

The June report is predominantly favorable, but definitely mixed. “There’s no question things are improving, but very slowly and modestly,” economist Elliot Winer, a member of AIM’s Board of Economic Advisors, told the Boston Globe.

Strong May numbers have held up so far, and the private-sector job creation, though limited, is a positive sign. On the downside, job growth has slowed, and the declining labor force suggests that some jobseekers are discouraged.

Massachusetts continues to do a bit better than the nation, which is in sharp contrast to its performance in the two prior recoveries. It is also doing better compared to its own past performance. In the six months since employment bottomed out, the state has regained about 28 percent of the jobs lost in the downturn; this took more than two years last time around.

Two proposed Senate budget amendments designed to overhaul Unemployment Insurance rates in Massachusetts should be debated as part of a larger reform of the UI system.

One amendment filed by Senator Karen E. Spilka would raise the wage base upon which UI taxes are calculated, freeze the overall rate for three years at Schedule D, and tie more closely the rates paid by employers to the frequency with which those employers have work force reductions.

The second amendment, filed by Senator Thomas M. McGee, would index the taxable wage base to the rate of inflation. Both proposals are scheduled for discussion next week as part of debate on the Senate's proposed Fiscal Year 2011 state budget.

AIM has long supported comprehensive overhaul of the Unemployment Insurance system, but believes the two amendments focus too narrowly on rates and benefit expansion, and therefore fall short of the broad reform needed to help Massachusetts employers remain competitive. Employers also believe that lawmakers should debate UI reform on its own merits, not as part of the budget.

Unemployment Insurance is one of many areas in which Massachusetts employers struggle with some of the highest costs in the nation. One of the reasons is that the Massachusetts UI system includes a far more generous benefit structure than other states - Massachusetts is the only state, for example, to provide 30 week of jobless benefits at the standard benefit amount.

Employers share some common ground with the proposed Spilka amendment on making companies that use the Unemployment Insurance system pay higher rates than those that do not. AIM believes that employers who seldom have layoffs should not subsidize the cost of unemployment benefits for companies that regularly trim payrolls.

But increasing the taxable wage base from $14,000 to $20,900 and indexing that base to inflation without simultaneously addressing benefit costs risks placing the system on "autopilot" with little prospect of real reform. Employers already struggling with the economic downturn, soaring health insurance premiums and other challenges need policymakers to examine all of the factors driving up UI rates.

UI costs have risen sharply during the past two years as the recession pushed the Bay State's jobless rate past 9 percent and increased pressure on the Unemployment Insurance Trust Fund. Governor Deval Patrick in February signed a bill limiting the average UI tax increase faced by Massachusetts employers to $111 per employee in 2010. The measure averted an automatic increase of $252 per employee that would have taken effect had the Legislature and administration not acted.

AIM urges Senators to reject the two Unemployment Insurance amendments. We look forward to working with lawmakers to develop comprehensive reform for the UI system.